This competing renewal application builds on our studies during the previous funding period in which we found that treatment of patients with new onset Type 1 diabetes mellitus (T1DM) with a modified humanized anti-CD3 monoclonal antibody (mAb) reduces the loss of insulin production over the first 2 years of the disease. We identified subpopulations of T cells that are induced by the mAb, which have immune regulatory function by virtue of the cytokines they make (CD4+IL-10+) or through contact dependent mechanisms (CD8+). In this study, like all others that have shown efficacy in T1DM, treatment was initiated within the first 6 weeks after diagnosis, and in previous immune suppressive studies, it was found that the intervention was only effective when given during this time period. This was surprising considering the chronic nature of the autoimmune process that causes diabetes. In the first Aim of the proposed studies, we plan to test, in a Phase II randomized placebo controlled trial, whether anti-CD3 mAb will also arrest the loss of insulin production when it is administered to patients with longer duration of disease and if not, the reasons that it does not. To do this, in the Second Aim, we are planning studies that utilize samples from the human trial to study the effects of the mAb on antigen reactive T cells, induction of regulatory T cells, as well as measuring clinical parameters that may predict response which were developed in the previous funding period. In the Third Aim, we plan to study the CD8+ Foxp3+ T cells that we have found are induced by the mAb treatment and identify markers that identify them, determine the ligands they use to mediate contact dependent inhibition, their antigen specificity, and determine the role of antigen presenting cells in their induction. The proposed studies involve a clinical population that is not studied by other study groups and yet encompasses a large percentage of patients with T1DM. The mechanistic studies that are proposed are done with human cells, and will provide new information about immunologic tolerance as well as the mechanisms of the anti-CD3 mAb, which appears to hold promise as a new treatment for T1DM. These studies are not supported by groups that sponsor clinical trials. Thus, this proposal will bridge both mechanistic studies and a clinical trial to develop a new treatment paradigm that may be beneficial to a large number of patients with T1DM.